LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 76th Regular Session
April 18, 1999
TO: Honorable Jane Nelson, Chair, Senate Committee on Health
Services
FROM: John Keel, Director, Legislative Budget Board
IN RE: SB1614 by Lucio (Relating to the long-range plan for the
South Texas Hospital and the provision of tuberculosis
and other health care services in the Lower Rio Grande
Valley.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* SB1614, As Introduced: negative impact of $(23,892,328) through *
* the biennium ending August 31, 2001. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2000 $(16,600,000) *
* 2001 (7,292,328) *
* 2002 (8,292,328) *
* 2003 (7,792,328) *
* 2004 (7,792,328) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Probable Revenue Change in Number of *
* Year Savings/(Cost) from Gain/(Loss) from State Employees from *
* General Revenue Fund General Revenue Fund FY 1999 *
* 0001 0001 *
* 2000 $(16,600,000) $0 0.0 *
* 2001 (1,600,000) (5,692,328) (50.5) *
* 2002 (2,600,000) (5,692,328) (50.5) *
* 2003 (2,100,000) (5,692,328) (50.5) *
* 2004 (2,100,000) (5,692,328) (50.5) *
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Fiscal Analysis
The bill would require the Board of Health to contract for the
construction of a new physical facility for outpatient health care
services at the site of the current South Texas Hospital or collocated
with the Regional Academic Health Center at a common site in Harlingen,
Texas, and adjacent to the center. The bill would require the department
to contract for renovations of the facilities at the South Texas
Hospital in order to continue to provide outpatient services until
construction of the new facility is completed. The department would be
allowed to contract with a political subdivision to provide outpatient
care. The department would be required to contract with a public or
private health care provider or entity to provide inpatient health care
services, including tuberculosis services, and laboratory services
currently provided at the South Texas Hospital, by September 1, 2000.
The bill would authorize persons whose positions are eliminated due to
transfers of services and contracts required by provisions in the bill
certain enhanced retirement benefits, under certain circumstances.
Methodology
Costs to renovate physical facilities to provide tuberculosis and other
health care services are assumed by the Department of Health to total $15
million in General Revenue in 2000. An additional $1 million would be
required in 2002 for moving and transition expenses and an additional
$500,000 in fiscal years 2003 and 2004 for increased operating expenses
in the new facility.
Additional resources required to contract for inpatient tuberculosis
services is assumed to be approximately $2.6 million in General Revenue
per fiscal year, beginning in 2001.
The department estimates a salary savings of approximately $1 million per
fiscal year in association with the reduction in Full-Time Equivalent
positions due to contracting for services.
Requiring the Department of Health to contract for inpatient services and
no longer directly provide those services at the South Texas Hospital
would result in a loss of approximately $5.7 million per year to the
General Revenue Fund from the Disproportionate Share Hospital program.
It is probable that implementing the provisions of the bill relating to
enhanced retirement benefits for certain persons would not impact the
actuarial soundness of the Employees Retirement System based on the
current contribution rates for the next biennium. Therefore, no
additional state contributions for retirement would be necessary.
Local Government Impact
No significant fiscal implication to units of local government is
anticipated.
Source Agencies: 655 Texas Department of Mental Health and Mental
Retardation, 501 Department of Health, 327
Employees Retirement System
LBB Staff: JK, TH, KF